Hansbrough v. Peck,
Annotate this Case
72 U.S. 497 (1866)
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U.S. Supreme Court
Hansbrough v. Peck, 72 U.S. 5 Wall. 497 497 (1866)
Hansbrough v. Peck
72 U.S. (5 Wall.) 497
1. Where in part performance of an agreement a party has advanced money, or done an act, and then stops short and refuses to proceed to its conclusion, the other party being ready and willing to proceed and fulfill all his stipulations according to the contract, such first-named party will not be permitted to recover back for what has thus been advanced or done.
2. By the statutes of Illinois as existing in January, 1857, a contract for a rate of interest exceeding six percent, did not invalidate the contract.
3. Where a parol promise is in substance but the same with a written one which the party is already bound to perform, and where all that is done on the former is in fact but in fulfillment of the latter, no new consideration passing between the parties, the existence or enforcement of the parol contract cannot be set up as a rescission of the written one.
In January, 1857, Hansbrough and Hardin agreed with one Peck to buy certain lots in Chicago for $134,000. The purchase money was made payable in nine installments, each being for $4,300 except the last, payable April 28, 1861, which was for $90,000. The lots had on them at the time two wooden houses and a barn.
By the contract it was agreed
"that the prompt performance of the covenants, and payment of the money shall be a condition precedent, and that TIME IS OF THE ESSENCE OF THE CONDITION."
"that in case default shall be made in the payment of any or either of said notes or any part thereof at the time or any of the times above specified for the payment thereof, for thirty days thereafter, the agreement, and all the preceding provisions thereof, shall be null and void, and no longer binding, at the option of said vendor. And all the payments which shall have been made absolutely and forever forfeited to said vendor, or at his election the covenants and liability of the purchasers shall continue and remain obligatory."
"That in case of default in the payments promptly on the days named by the purchasers, that it is also the right
of said vendor to declare the contract ended and prior payments forfeited, and to consider all parties in the possession of the premises at the time of such default tenants at will of said vendor at a rent equal to ten percent on the whole amount of said purchase money. And the vendor from that time is declared to be restored, with the possession and right of possession in the premises, to the exercise of all powers, rights, and remedies provided by law or equity to collect such rent, or remove such tenants, the same as if the relation of landlord and tenant were created by an original, absolute lease for that purpose on a special rent payable quarterly on a tenure at will, and that the said tenants will not commit or suffer any waste or damage to said premises or the appurtenances, but, on the termination of such tenancy will deliver the premises in as good order and repair as they were at the commencement of such tenancy."
By a statute of Illinois: [Footnote 1]
"The rate of interest upon the loan or forbearance of any money, goods, or things in action, shall continue to be six dollars upon one hundred dollars for one year."
"Any person who, for any such loan, discount, or forbearance, shall pay or deliver any greater sum or value than is above allowed to be received may recover in an action against the person who shall have taken or received the same threefold the amount of money so paid, or value delivered above the rate aforesaid, either by an action of debt in any court having jurisdiction thereof, or by bill in chancery in the circuit court, which court is hereby authorized to try the same, provided said action shall be brought or bill filed within two years from when the right thereto accrued."
Under this contract and in the state of the law above stated, the purchasers went into possession and laid out $18,000 in improving the property by building on it. They paid $10,000 also on account of the notes, and about two years' interest. After erecting these improvements, and
paying the two years' interest, the purchasers, becoming embarrassed or dissatisfied with their contract, were desirous of surrendering it, but were persuaded by the vendor to remain, and they paid the interest for another year, 1859, making in all about $28,000 of interest paid. The last payment of interest was made 31 January, 1860. After that, no further payments were made, and on the 1st April, 1861, the vendor filed a bill in chancery in one of the state courts to prevent the threatened removal of the buildings from the premises and to get possession of the property. On the 23d August, 1862, a decree was entered to this effect and the vendor put into the possession. The decree restrained the purchasers from removing the buildings, declaring them to be fixtures, and for the default in the payment of the purchase money the plaintiff, the vendor, was put in possession and all the tenants were required to attorn to him. It declared further that he was entitled to the estate and interest in the lots the same as before the contract. And to remove any doubt in the title by reason of the contract and the default in the payments, it declared that the premises should be discharged from any encumbrance or charge in respect to the contract of sale and that the purchasers or anyone claiming through them should be forever debarred from having any estate or interest or right of possession in the premises, having lost the same by willful default, and that the articles of agreement were to be held, in relation to the title and possession, as of no effect and void as it respected the vendor and all claiming under or through him.
In this state of facts, the purchasers filed, August 23, 1862, a bill in the Circuit Court for the Northern District of Illinois to recover back the moneys paid upon the contract and also for the value of improvements made on the premises, the ground of the bill being that the contract had been rescinded by the defendant.
In regard to the matter before mentioned of the purchasers' having been desirous of surrendering, and of being persuaded by the vendor to stay, the bill alleged:
"That the contract became and was so intolerably oppressive that in November, 1859, they proposed a relinquishment of the same unless it should be modified or made less rigorous and exacting. That the vendor thereupon proposed to them that if they would not abandon the same, but would pay certain taxes, assessments, and charges, and interest then accrued, the whole amounting to ten thousand dollars, within sixty days from the first day of December, 1859, he would thereafter so accommodate and indulge them that they could carry on said contract, and to this end he would, until there should be a revival of trade and business in Chicago, take the net income from the property over and above taxes and insurance in lieu of interest on the purchase money until such revival of trade and business. That your orators accepted said proposition, and in accordance with his request, in order to comply with the proposition, sent an agent from Kentucky to reside in Chicago aforesaid, to take charge of the property and collect and get in the rents and pay the same to said vendor, less the taxes and insurance. And also your orators, on or about the 31st day of January, A.D. 1860, paid said taxes, assessments, and other charges and accrued interest, the whole amounting to ten thousand dollars as aforesaid, in compliance with his said proposition, and thereafter were ready and willing and, from time to time offered to pay the vendor the net income from the premises after deducting the taxes and insurance as aforesaid; but he declined to abide by his said proposition, and thereafter continued to enforce the said contract of January 29, 1857, and all its provisions, with the most exacting rigor, notwithstanding there was no considerable increase of income from the property nor a revival of trade and business in Chicago."
Upon this case, which in substance was the one set forth, the defendant in the case, the original vendor, demurred, and the court below dismissed the bill.